Gold dips on this morning’s jobs report that shows private payrolls well above analysts estimates. The yellow metal was already under pressure as the U.S. dollar strengthened on speculation that positive jobs data may motivate the Federal Reserve’s monetary policy to become more hawkish.
After ADP issued the report showing private payrolls increased at a faster than expected in June, the Comex August gold contract gold dropped back below $1,760. The 692,000 jobs figure is well above the 550,000 Dow Jones estimate, though it fell short of May’s numbers, which were revised down from 978,000 to 886,000. The brightest star in the report was the leisure and hospitality sector that grew by 332,000 jobs.
An earlier-than-expected increase in Fed interest rates would be considered bearish for gold, which would become a less attractive risk-off investment. But concerns about inflation kept a floor under prices. Gold is a traditional hedge against inflation.
“The unemployment rate would have to drop fairly substantially, or inflation would have to really continue at a very high rate before we would take seriously a rate hike in 2022, but I’m not ruling it out,” Fed Governor Christopher Waller told Bloomberg TV on Tuesday.
The official U.S. June jobs report is set for release Friday, after last week’s initial jobless claims report comes out on Thursday.
August gold futures fell 1% Tuesday to settle at $1,763.60 an ounce on Comex. The front-month contract lost 0.8% in the first two days of this week. It’s down 7.4% so far this month after advancing 7.8% in May, the best month for the precious metal since July. Gold gained 3% in April and dropped in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic and is down 6.9% so far in 2021. Currently, the August contract is down $6.50 (-0.37%) to $1,758.40 and the DG spot price is $1,759.30.
There were other signs that the economy is rebounding after the pandemic. U.S. consumer confidence data released Tuesday showed that Americans were more confident this month than at any time during the pandemic. The Conference Board’s consumer confidence index rose to the highest level since February 2020.
Investors will also be watching for the first-of-the month manufacturing reports from the U.S. and other major economies on Thursday.
September silver futures retreated 1.3% Tuesday to settle at $25.90 an ounce on Comex. The front-month contract dropped 0.9% the first two days of the week. Silver is down 7.5% so far this month after rallying 8.3% in May in the best monthly performance since December. The metal advanced 5.5% in April and dropped in February and March. It rose 47% in 2020 and is down 1.9% so far this year. The September contract is currently up $0.059 (+0.23%) an ounce to $25.960 and the DG spot price is $25.94.
Spot platinum fell 2.4% Tuesday to $1,077.60 an ounce and retreated 3% in the first two days of this week. It’s down 9.3% in June after losing 1.5% in May. The autocatalyst metal is up 0.4% in 2021. The DG spot price is currently down $12.50 an ounce to $1,065.10.
Spot palladium decreased 0.4% Tuesday to $2,691.50 an ounce, though it’s up 1.6% in the first two days of this week. It has retreated 5.4% in June after losing 4.1% in May. It’s up 9.8% so far in 2021. The DG spot price is up $30.80 an ounce, currently, to $2,726.00.
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